Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (151231)	2/14/2002 5:20:24 PM
From: maceng2	Respond to of 436258

Enron witness: 'Lay was duped' news.bbc.co.uk Former Enron employee and "whistle blower" Sherron Watkins has said the firm's former chief executive Kenneth Lay was 'duped'. Speaking before a congressional committee, Ms Watkins said that she discovered a $700m (£489m) hole in Enron's finances and urged former chief executive Kenneth Lay to find out who was responsible. But she maintained that Mr Lay, who holds an economics doctorate, did not understand the gravity of the situation, and that he was duped by his senior management Andrew Fastow and Jeffrey Skilling. "Mr Skilling and Mr Fastow were highly intimidating and very smart individuals," she said, adding that Mr Fastow sought to push her out of the company after she took her concerns to Mr Lay. She also placed blame on Enron's auditor, Andersen - for signing off on documents it should not have done - and on Vinson & Elkins, a law firm representing Enron. Lay did not understand The witness was questioned closely by chairman of the committee, Billy Tauzin, who said that she presented the problems clearly to Mr Lay. But Ms Watkins still maintained that, in her opinion, Mr Lay did not fully grasp the situation. Mr Lay came under heavy fire when he appeared before a congressional committee last week, even though he remained silent in order to avoid incriminating himself. A report obtained by the law makers revealed that, during October, Ms Watkins had adviced Mr Lay to restate earnings, stress his lack of involvement in the problems and blame others. Baxter warning Ms Watkins said that Jeffrey Skilling - who was Enron's chief executive for a brief period in 2000 - left the firm because he could foresee the problem and wanted to get as far away as possible. She described him as "an intense, hands-on manager". Mr Skilling claimed not to know the details of the problematic partnerships when he testified before a committee last week. Clifford Baxter, a former senior executive who committed suicide last month, "complained mightily" to Mr Skilling about the partnerships, according to Ms Watkins. But she claimed he was not pushed out of the firm but left for personal reasons. She also mentioned that she could not remember any concern over the fate of shareholders during discussion over the firm's precarious financial situation. 'Courageous' Ahead of her opening speech, investigators described Ms Watkins as a "courageous bright spot in an otherwise sorry and outrageous saga". Congressmen were hoping that Ms Watkins, the Enron vice-president for corporate development, would finally shed some light on the dubious accounting practices of Enron. Ms Watkins said she warned the company's former chief executive Kenneth Lay last summer about their accounting practices. She appeared before Congress as a willing witness. Her testimony follows a parade of top Enron officials who have refused to answer questions, including Kenneth Lay and sacked chief financial officer Andrew Fastow. Investigators are eager to learn how, when and why her warnings were ignored by Enron's senior management. Enron was declared bankrupt last December after admitting it had inflated its profits, and has been shrouded in scandal ever since. Implosion "She sought valiantly - sadly in vain - to get the people in charge to face facts," said Jim Greenwood, chairman of the subcommittee, as he introduced the session. He referred to Ms Watkins as a "lone voice" and a "faithful employee of Enron," as he outlined the warnings she presented to her boss. Sherron Watkins Age 42 1981 graduate in accounting 1982-1993 Andersen employee 1993-2002 Enron employee Husband - Richard Daughter - Marion In August, Ms Watkins sent an anonymous letter to Mr Lay in which she expressed her fears and worries about Enron's accounting practices. "I am incredibly nervous that we will implode in a wave of accounting scandals," she wrote. "The business world will consider the past successes as nothing but an elaborate accounting hoax" if Enron's deceptions were found out. She then continued her campaign through a series of memos, but was repeatedly brushed off by more senior staff. "We need to come clean," she said to Ken Lay during a meeting on 30 October shortly before the firm came under investigation. "It's clear to us that she was yelling fire and no one was running to the exits," said Ken Johnson, a spokesman for the House Energy and Commerce Committee. Former Fed chief comments Also on Thursday, former federal reserve chairman Paul Volcker is continuing his testimony to the senate banking committee about accounting and investor protection issues. It emerged on Wednesday that Mr Volcker sought Enron funds for a $500,000 contribution for the International Accounting Standards Board. Mr Volcker has now been appointed to oversee changes to the accounting practices of Andersen, Enron's former auditor. Meanwhile, Enron's acting chief executive, Stephen Cooper fired two top accounting officers in a disciplinary action as he seeks to turn the company around. Both executives were subsequently named as party to the partnership schemes by Ms Watkins. The House of Representative earlier cancelled a scheduled appearance of Kenneth Lay, saying it would be a waste of time seeing as he would invoke his right to remain silent.